Essays

Problem with health care is for-profit insurance

This piece originally appeared on the Register-Guard (Eugene, Ore), Jan 9, 2012

Author: Samuel Metz and Charlotte Maloney

Date: 01/09/2012

 

Modern mythology recounts James Carville giving candidate Bill Clinton memorable advice regarding his upcoming presidential campaign: “It’s the economy, stupid.” Those of us wrestling with health care reform might take similar advice: “It’s the financing, stupid.”

Why do politicians such as Sen. Ron Wyden, D-Ore., and Rep. Paul Ryan, R-Wis., obsess with untried models of health care reform? They propose a “premium support option” for Medicare that would also extend to small businesses. Insurance companies are expected to compete with traditional Medicare to provide comprehensive benefits at affordable prices. Beneficiaries unable to afford premiums will receive vouchers of limited sums to support their premiums; hence the name, “premium support.”

This plan presumes that private insurance companies will eagerly compete for market share by offering better benefits at lower prices to our seniors. This simply does not happen.

Our two congressmen may be confusing American insurance companies with those in Europe. European companies are forbidden to discriminate on the basis of health, must offer policies to any applicant, must supply comprehensive benefits in every policy, and cannot cancel a policy for any reason. They compete by offering better benefits at lower costs with better customer service.

In contrast, American insurance companies play by entirely different rules. They compete by refusing policies to sick applicants, shrinking benefits, dropping policy holders as soon as they get sick, and denying or delaying payment to providers. In short, they compete by providing less care to fewer people.

Our last experience with letting private insurance companies compete for seniors (Medicare Advantage) reconfirmed this: Private insurance companies skimmed off the healthiest seniors and provided them with no better benefits than traditional Medicare except they cost the government 15 percent more. Why should we expect private insurance to be more successful than Medicare with the Wyden-Ryan plan?

If we define a “successful” health care system as one that delivers better care to more people for less money than we do, examples abound around the world and within our own country. These systems come in all varieties — complete government control, minimal government control, private providers, group providers, fee-for-service physicians, salaried physicians, managed care, medical homes — you name the variation, and it’s been used successfully. The United States uses all of these, but our health care is in the pits.

The United States lacks the three common elements used in every successful health care system. And these elements are not delivery methods; they are financing methods:

* Everyone is included forever. No exclusion for any reason. No one is dropped or marginalized when they become old, sick, poor or unemployed.

* Little or no cost-sharing. No patient is discouraged from seeking health care. Instead of making a patient decide if they need medical care before seeing a physician, the physician decides after seeing the patient.

* Financing is provided by publicly accountable, transparent, not-for-profit agencies. Although some models permit profits from delivering health care, none allows profits from financing health care.

Successful systems can make almost any delivery method succeed, but only when financing fulfills these elements (unlike the Wyden-Paul proposal, which fails to address any of them). No delivery system has ever succeeded in their absence. Though pundits may obsess endlessly why these requirements are theoretically unnecessary, the reality is stark. Bad financing makes any delivery system fail.

America appears wedded to our traditional (and unsuccessful) private health insurance industry that fragments us into the healthy (who can purchase access to health care) and the sick (who can’t). And the fragmentation is not static. If you were previously healthy but become sick, your insurance company will do its best to exclude you from access on their dollar.

No other nation has provided universal cost-effective health care with this method. We haven’t either. There is no reason to think it will work in the future.

Wyden and Ryan neatly avoid tampering with our lethal dependence on financing health care with private insurance. This continues to place the health of the private insurance industry over the health of the people they serve.

Without a change in health care financing, reform is futile. In all recorded history and throughout the world today, we find no working models of a society providing universal cost-effective health care using our unique American system of private health insurance. It is possible Neanderthals achieved this goal with private insurance but left no written record. Doubtful.

We spin our wheels by focusing on our delivery system. It’s the financing, stupid.

Charlotte Maloney of Eugene is a retired occupational therapist and outgoing treasurer of Health Care for All-Oregon. Samuel Metz, M.D., of Portland is a member of the Oregon Single Payer Coalition.